The Federal Tax Authority (FTA) has issued a crucial reminder for natural persons engaged in business or commercial activities in the UAE. If your aggregate business turnover exceeded AED 1 million during the last financial year, it is mandatory to register for Corporate Tax no later than March 31, 2025.Failure to comply with this requirement will result in a fixed administrative penalty of AED 10,000. To avoid penalties and ensure seamless compliance, eligible individuals are strongly advised to complete their registration within the prescribed deadlines.
Who Needs to Register for Corporate Tax?
If you are a natural person conducting business or commercial activities in the UAE,- such as freelancing, sole proprietorship, e-commerce, or other independent business activities you must register for Corporate Tax if your aggregate turnover from business activities exceeds AED 1 million in a Gregorian calendar year and you:
✅ Operate a business or engage in business activities in the UAE.
✅ Have a Permanent Establishment in the UAE.
✅ Earn State-Sourced Income, meaning income accrued from UAE-based activities.
To avoid penalties and ensure compliance, registration must be completed by March 31, 2025.
This Blog is a Part of Our Tax Advisory Services
Frequently Asked Questions
My turnover from a single business is below AED 1 million, but my total turnover from multiple businesses exceeds this amount. Do I need to register?
Yes. Corporate Tax registration is based on total business turnover from all activities combined. If your aggregate turnover exceeds AED 1 million, you are required to register.
– Registration Deadline: March 31, 2025
– Penalty for Non-Registration: AED 10,000
I am a salaried employee earning more than AED 1 million. Does Corporate Tax apply to me?
No. Employment income, including salaries, wages, and benefits, is not subject to Corporate Tax, regardless of the amount earned.
However, if you also earn income from freelancing, consulting, or any business activity, and your business turnover exceeds AED 1 million, you must register for Corporate Tax, even if you are employed.
I earn income from personal investments. Am I subject to Corporate Tax?
It depends on how your investments are managed:
- Not Subject to Corporate Tax:
Income from personal investments, such as dividends, capital gains, and rental income from personally owned properties, provided these are not part of a business.
- Subject to Corporate Tax:
If investments are managed through a licensed business (e.g., an investment firm, real estate brokerage, or trading company).
If your total business-related turnover, including income from investment activities conducted as a business, exceeds AED 1 million.
I am already registered for Corporate Tax, but my turnover has dropped below AED 1 million. What should I do?
If your turnover falls below AED 1 million after registering, you should not deregister unless you completely cease all business activities.
- You will retain your Tax Registration Number (TRN).
- You must continue to file a ‘nil’ Tax Return by September 30 of the year following the calendar year in which your turnover dropped below AED 1 million.
What is the applicable Corporate Tax rate?
The UAE Corporate Tax rates are:
- 0% on taxable income up to AED 375,000.
- 9% on taxable income exceeding AED 375,000.
- Different rates may apply to multinational entities under the OECD Pillar Two rules.
When should I file my Corporate Tax return?
Corporate Tax returns must be filed annually.
- Filing Deadline: Nine months from the end of the relevant tax period.
- For businesses following the calendar year (January – December), the tax return is due by September 30 of the following year.
Next Steps: Register Now to Avoid Penalties
If your business turnover exceeds AED 1 million, ensure timely registration through the FTA portal before March 31, 2025, to avoid penalties and ensure full compliance.
For expert assistance with Corporate Tax registration, filing, and compliance, consult our team of tax professionals and legal advisors today.
